Correlation Between Walgreens Boots and GMTech
Can any of the company-specific risk be diversified away by investing in both Walgreens Boots and GMTech at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Walgreens Boots and GMTech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walgreens Boots Alliance and GMTech Inc, you can compare the effects of market volatilities on Walgreens Boots and GMTech and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Walgreens Boots with a short position of GMTech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walgreens Boots and GMTech.
Diversification Opportunities for Walgreens Boots and GMTech
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Walgreens and GMTech is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Walgreens Boots Alliance and GMTech Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GMTech Inc and Walgreens Boots is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Walgreens Boots Alliance are associated (or correlated) with GMTech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GMTech Inc has no effect on the direction of Walgreens Boots i.e., Walgreens Boots and GMTech go up and down completely randomly.
Pair Corralation between Walgreens Boots and GMTech
Considering the 90-day investment horizon Walgreens Boots Alliance is expected to under-perform the GMTech. But the stock apears to be less risky and, when comparing its historical volatility, Walgreens Boots Alliance is 33.44 times less risky than GMTech. The stock trades about -0.05 of its potential returns per unit of risk. The GMTech Inc is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 4.00 in GMTech Inc on September 14, 2024 and sell it today you would earn a total of 66.00 from holding GMTech Inc or generate 1650.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 31.23% |
| Values | Daily Returns |
Walgreens Boots Alliance vs. GMTech Inc
Performance |
| Timeline |
| Walgreens Boots Alliance |
| GMTech Inc |
Walgreens Boots and GMTech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walgreens Boots and GMTech
The main advantage of trading using opposite Walgreens Boots and GMTech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walgreens Boots position performs unexpectedly, GMTech can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in GMTech will offset losses from the drop in GMTech's long position.| Walgreens Boots vs. PetMed Express | Walgreens Boots vs. 111 Inc | Walgreens Boots vs. China Jo Jo Drugstores | Walgreens Boots vs. High Tide |
| GMTech vs. Hf Foods Group | GMTech vs. Pure Cycle | GMTech vs. Aris Water Solutions | GMTech vs. Enel Chile SA |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
Other Complementary Tools
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency |